<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12
NABORS INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(l) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Notice
of
1997 Annual Meeting
of
Shareholders
and
Proxy Statement
- --------------------------------------------------------------------------------
[NABORS INDUSTRIES LOGO]
- --------------------------------------------------------------------------------
<PAGE> 3
NABORS INDUSTRIES, INC.
515 WEST GREENS ROAD, SUITE 1200
HOUSTON, TEXAS 77067
January 31, 1997
TO OUR SHAREHOLDERS:
You are cordially invited to attend the 1997 Annual Meeting of Shareholders
(the "Annual Meeting") of Nabors Industries, Inc., which will be held on
Tuesday, March 4, 1997, beginning at 11:00 a.m. Central Standard Time at the
Wyndham Greenspoint Hotel, 12400 Greenspoint Drive, Houston, Texas 77060.
Information about the Annual Meeting, including matters on which
shareholders will act, may be found in the Notice of Annual Meeting and Proxy
Statement included herewith. We look forward to greeting in person as many of
our shareholders as possible.
Whether or not you plan to attend the meeting in person, it is important
that your shares be represented and voted. Accordingly, after reading the
enclosed Notice of Annual Meeting and Proxy Statement, you are urged to sign,
date and return the enclosed Proxy in the stamped, addressed envelope provided.
Sincerely yours,
/s/ EUGENE M. ISENBERG
EUGENE M. ISENBERG
Chairman of the Board
<PAGE> 4
NABORS INDUSTRIES, INC.
515 WEST GREENS ROAD, SUITE 1200
HOUSTON, TEXAS 77067
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 4, 1997
------------------------
The 1997 Annual Meeting of Shareholders (the "Annual Meeting") of NABORS
INDUSTRIES, INC. will be held at the Wyndham Greenspoint Hotel, 12400
Greenspoint Drive, Houston, Texas 77060 on Tuesday, March 4, 1997 at 11:00 a.m.
to consider and act upon the following matters:
1. The election of three Class III directors for terms expiring in 2000;
2. Such other business as may properly come before the Annual Meeting.
The Board has fixed the close of business on January 10, 1997 as the record
date for determining the shareholders who are entitled to vote at the Annual
Meeting and any adjournment or postponement thereof.
By Order of the Board of Directors,
/s/ DANIEL MCLACHLIN
DANIEL MCLACHLIN
Secretary
Dated: January 31, 1997
Please date and sign the enclosed Proxy, and return it at your earliest
convenience in the enclosed stamped and addressed envelope, so that, if you are
unable to attend the Annual Meeting, your Shares may be voted.
<PAGE> 5
NABORS INDUSTRIES, INC.
------------------------
PROXY STATEMENT
------------------------
1997 ANNUAL MEETING OF SHAREHOLDERS
MARCH 4, 1997
This Proxy Statement has been prepared in connection with the solicitation
by the Board of Directors (the "Board") of Nabors Industries, Inc., a Delaware
corporation (the "Company" or "Nabors"), of proxies in the accompanying form to
be used at the 1997 Annual Meeting of Shareholders (the "Annual Meeting"), to be
held at the Wyndham Greenspoint Hotel, 12400 Greenspoint Drive, Houston, Texas
77060 at 11:00 a.m. Central Standard Time on Tuesday, March 4, 1997, or at any
adjournment or postponement thereof.
The principal executive offices of the Company are located at 515 West
Greens Road, Suite 1200, Houston, Texas 77067. This Proxy Statement and
accompanying Notice of Annual Meeting and Proxy are first being mailed to
shareholders on or about January 31, 1997.
At the Annual Meeting, each share of Common Stock of the Company
(collectively, the "Shares" or "Nabors Shares") is entitled to one vote. Only
shareholders of record on the books of the Company at the close of business on
January 10, 1997 will be entitled to vote at the Annual Meeting. A quorum is
necessary to transact business at the Annual Meeting. The presence in person or
by proxy at the Annual Meeting of the holders of the majority of the Shares
outstanding on January 10, 1997, constitutes a quorum. On January 10, 1997,
there were 91,721,073 Shares outstanding and entitled to vote.
Proxies received will be voted in accordance with the shareholders'
directions given in the Proxies. In the absence of directions, Shares will be
voted FOR the nominees for election as Directors named in this Proxy Statement.
Any Proxy received by the Company may be subsequently revoked at any time before
it is actually voted. Proxies may be revoked by any of the following actions (i)
filing with the Secretary of the Company, at or before the Annual Meeting, but
in any event prior to the vote on the matter as to which revocation is sought, a
written notice of revocation bearing a date later than the Proxy; (ii) duly
executing and submitting a subsequent Proxy relating to the Annual Meeting; or
(iii) voting in person at the Annual Meeting (although attendance at the Annual
Meeting will not, in and of itself, constitute a revocation of a Proxy). Any
written notice revoking a Proxy should be sent to the Secretary of the Company
at the Company's executive offices, 515 West Greens Road, Suite 1200, Houston,
Texas 77067.
In accordance with the Company's Restated Certificate of Incorporation, as
amended, a plurality of the votes cast at a meeting at which there exists a
quorum is required for the election of directors. The election of directors is
the only matter scheduled to be considered at the 1997 Annual Meeting. If any
other matter should be presented at the Annual Meeting upon which a vote may be
taken, it is intended that Shares represented by Proxies in the accompanying
form will be voted with respect thereto in accordance with the judgment of the
person or persons voting such Shares. Eugene M. Isenberg and Anthony G. Petrello
or either of them, each with full power of substitution, have been designated as
proxies to vote the Shares solicited hereby. Under Delaware law, there are no
rights of appraisal or similar rights of dissenters with respect to the matters
under consideration at this Annual Meeting.
A broker non-vote occurs when a nominee holding Shares for a beneficial
owner does not vote on a particular proposal because the nominee does not have
discretionary voting power with respect to the particular item under
consideration and has not received instructions from the beneficial owner. Under
Delaware law abstaining votes (votes withheld by shareholders who are present
and entitled to vote) and broker non-votes are deemed to be present for purposes
of determining whether a quorum is present at a
<PAGE> 6
meeting and although abstentions and broker non-votes are not deemed to be votes
duly cast, abstaining votes are deemed to be entitled to vote while broker
non-votes are not deemed to be entitled to vote. Abstentions and broker
non-votes will not be included in the tabulation of the voting results with
respect to the election of directors and therefore will not have any effect on
such vote.
ELECTION OF DIRECTORS
The Restated Certificate of Incorporation, as amended, authorizes the Board
to fix the number of Directors from time to time, but at no less than five nor
more than eleven. The number of directors is currently established at eight. The
Restated Certificate of Incorporation, as amended, also provides for three
classes of directors, designated Class I, Class II and Class III, each currently
having three-year terms of office. Each class of directors is to consist of, as
nearly as possible, one-third of the total number of directors constituting the
entire Board of Directors. Except for directors elected to fill vacancies on the
Board of Directors (whether created by death, resignation, removal or expansion
of the Board), the directors of each class will be elected for a term of three
years and until their successors have been elected and qualified. At the Annual
Meeting, three Class III directors, Mr. Gary T. Hurford, Mr. Eugene M. Isenberg
and Mr. Jack Wexler, are nominated for election to the Board to serve for a
three-year term.
If the enclosed Proxy is signed and returned, it will be voted FOR the
election of Messrs. Hurford, Isenberg and Wexler as Class III directors to serve
until the 2000 Annual Meeting of Shareholders or until their successors have
been duly elected and qualified, unless contrary directions are given therein.
However, should any nominee become unavailable or prove unable to serve for any
reason, the Proxy will be voted for the election of such other person as the
Board may select to replace such nominee, unless the Board instead fixes the
number of Directors at less than eight. The Board has no reason to believe that
the nominees will not be available or prove unable to serve.
The following table sets forth certain information concerning each Class
III director nominee and the continuing Class I and Class II directors. The age
of each nominee and continuing director, his positions and offices with the
Company, the year in which he first became a Director of the Company, his
business experience during the past five years or more, and the other
directorships he holds are shown below. Similar information is provided
concerning Executive Officers who are neither Directors nor nominees for
election as Directors.
2
<PAGE> 7
CLASS III DIRECTOR NOMINEES -- TERMS EXPIRING IN 2000
<TABLE>
<CAPTION>
DIRECTOR
OF THE
POSITION WITH THE COMPANY COMPANY
NAME AGE AND PRIOR BUSINESS EXPERIENCE SINCE
---- --- ----------------------------- --------
<S> <C> <C> <C>
Gary T. Hurford............. 60 Member of the Compensation Committee of the Board 1991
of Directors since 1991. Mr. Hurford has been
President of Hunt Oil Company since 1986. He has
been employed by Hunt Oil Company since 1962 and
has held a number of positions including District
Engineer, Reservoir Engineer, Vice President of
Drilling and Production and Executive Vice
President of Energy. Previously he was employed
with Mobil Oil Company and Magnolia Petroleum
Company.
Eugene M. Isenberg.......... 67 Chairman of the Board of Directors, Chairman of the 1987
Executive Committee of the Board of Directors,
Chief Executive Officer and Director of the
Company since 1987. He is also a Director of
Danielson Holding Corporation (a financial
services holding company), and a Governor of the
American Stock Exchange. He served as Co-Chief
Executive Officer of NorthStar Tubular Corp. (a
trader in oil country tubular goods) from 1983 to
1986. From 1969 to 1982, Mr. Isenberg was
Chairman of the Board and principal shareholder
of Genimar, Inc. (a steel trading and building
products manufacturing company), which was sold
in 1982. From 1955 to 1968, Mr. Isenberg was
employed in various management capacities with
the Exxon Corporation.
Jack Wexler................. 71 Chairman of the Compensation Committee and a member 1987
of the Executive and Audit Committees of the Board
of Directors since 1987. He is an international
business consultant and has acted as a consultant
to exporting and petroleum service companies
since 1982. Prior to 1982, Mr. Wexler was
employed by the Exxon Corporation and its
affiliates, serving in senior staff and operating
management positions in the United States and the
Far East.
</TABLE>
3
<PAGE> 8
CLASS II CONTINUING DIRECTORS -- TERMS EXPIRING IN 1999
<TABLE>
<CAPTION>
DIRECTOR
OF THE
POSITION WITH THE COMPANY COMPANY
NAME AGE AND PRIOR BUSINESS EXPERIENCE SINCE
---- --- ----------------------------- --------
<S> <C> <C> <C>
Anthony G. Petrello......... 42 President and Chief Operating Officer of the 1991
Company since 1992 and a member of the Executive
Committee since 1991. He is also a Director of
Danielson Holding Corporation (a financial
services holding company) since 1996. Mr.
Petrello was formerly a partner with the law firm
Baker & McKenzie, which he had been with since
1979. In 1986, Mr. Petrello was named Managing
Partner of Baker & McKenzie's New York Office and
served in that capacity until 1991 when he
resigned as a partner in the Firm. He continues
as of counsel to the Firm and the Firm continues
to provide legal services to the Company.
Myron M. Sheinfeld.......... 66 Chairman of the Audit Committee of the Board of 1988
Directors since 1988 and a member of the
Compensation Committee since 1993. He is counsel
to the law firm of Sheinfeld, Maley & Kay, a
professional corporation located in Houston,
Texas. Mr. Sheinfeld was an adjunct professor of
law at the University of Texas, School of Law
from 1975 to 1991, and has been a contributing
author to numerous legal publications, and a
contributor, co-editor and co-author of Collier
On Bankruptcy, and a co-author of Collier On
Bankruptcy Tax for Matthew Bender & Co., Inc. He
is a member of the Board of Editors, "The
Practical Lawyer", and is a member of the Board
of Trustees of Third Avenue Trust.
Martin J. Whitman........... 72 Member of the Audit Committee since 1993. Chairman 1991
of the Board and a Director of Danielson Holding
Corporation (a financial services holding
company) since 1990; Chairman of Third Avenue
Trust (a registered investment company) since
1990; Chief Executive Officer of M. J. Whitman,
Inc., a broker-dealer since 1994; Adjunct
Lecturer, Adjunct Professor, and Distinguished
Fellow in Finance, Yale University School of
Management from 1972 to 1984 and 1992 to present.
</TABLE>
4
<PAGE> 9
CLASS I CONTINUING DIRECTORS -- TERMS EXPIRING IN 1998
<TABLE>
<CAPTION>
DIRECTOR
OF THE
POSITION WITH THE COMPANY COMPANY
NAME AGE AND PRIOR BUSINESS EXPERIENCE SINCE
---- --- ----------------------------- --------
<S> <C> <C> <C>
Hans W. Schmidt............. 67 From 1958 to 1992, Mr. Schmidt held a number of 1993
positions with C. Deilman A.G., a diversed energy
company located in Bad Bentheim, Germany,
including serving as a Director from 1982 to
1992. He also served from 1965 to 1992 as
Director of a subsidiary, Deutag Drilling, a
company with worldwide drilling operations. From
1988 to 1991, Mr. Schmidt served as President of
Transocean Drilling Company, a company of which
he was also a director from 1981 until 1991.
Richard A. Stratton......... 50 Vice Chairman of the Board of Directors and a 1986
member of the Executive Committee since 1992. Mr.
Stratton served the Company as President and
Chief Operating Officer from 1986 to 1992, as
Vice President from 1981 to 1986 and as Corporate
Controller from 1979 to 1981. From 1970 to 1979,
Mr. Stratton, a CPA, was associated with the
accounting firm of Price Waterhouse.
</TABLE>
EXECUTIVE OFFICERS (NOT DIRECTORS)
<TABLE>
<CAPTION>
POSITION WITH THE COMPANY
NAME AGE AND PRIOR BUSINESS EXPERIENCE
---- --- -----------------------------
<S> <C> <C>
Bruce P. Koch............... 37 Vice President, Finance, since January 1996, and Controller
of the Company since March 1990. He was associated with the
accounting firm of Coopers & Lybrand from 1983 to 1990 in
a number of capacities including Audit Manager. Mr. Koch
has been a Certified Public Accountant since 1982.
Daniel McLachlin............ 59 Vice President and Corporate Secretary of the Company since
1986. He was Manager, Administration of the Company from
1984 to 1986. From 1979 to 1984, he was the Vice
President, Human Resources of Nabors Drilling Limited, a
subsidiary of the Company.
</TABLE>
COMMITTEES OF THE BOARD
The Committees of the Board consist of an Executive Committee, Compensation
Committee and Audit Committee. The Company does not have a standing nominating
committee. A shareholder who wishes to nominate a candidate for election to the
Board should forward the candidate's name and detailed description of the
candidate's qualifications to the Secretary at the principal executive offices
at 515 West Greens Road, Suite 1200, Houston, Texas 77067. The Company requires
notice of nominations by shareholders of persons for election as directors at an
Annual Meeting to be delivered to the Company at least 120 days prior to such
meeting.
The Executive Committee is comprised of Messrs. Isenberg (Chairman),
Petrello, Stratton and Wexler. The Compensation Committee is comprised of
Messrs. Hurford, Sheinfeld and Wexler (Chairman). The Audit Committee is
comprised of Messrs. Sheinfeld (Chairman), Wexler and Whitman.
The Executive Committee met fifteen times during the fiscal year ended
September 30, 1996. The Executive Committee, as empowered by the Restated
Company's By-Laws, as amended, has all of the powers, rights and authority of
the Board of Directors to the extent permitted by law, except with respect to
certain actions as stated in the By-Laws.
5
<PAGE> 10
The Compensation Committee met two times during the fiscal year ended
September 30, 1996. The Compensation Committee is responsible for reviewing and
making recommendations with respect to the objectives, structure, cost and
administration of the Company's compensation programs and in that context
reviews employment agreements, salaries, bonuses, stock options and employee
benefit plans for officers and key employees.
The Audit Committee met two times during the fiscal year ended September
30, 1996. The Audit Committee reviews and approves the scope of audit and
non-audit services, the results of the audit, the adequacy of internal controls
and fee estimates for audit and non-audit services.
The Board of Directors met five times during the fiscal year ended
September 30, 1996. Except for Mr. Stratton and Mr. Whitman no incumbent
Director attended fewer than 75% of the aggregate of the (i) meetings of the
Board and (ii) meetings of all committees on which he served.
REMUNERATION OF DIRECTORS
Prior to January 1, 1996, Directors who are not employees of the Company
received a fee of $25,000 per annum. No additional fees were paid for attendance
at meetings of the Board or for attendance at each meeting of a committee of the
Board. Effective January 1, 1996, Directors who are not employees of the Company
receive $28,000 per annum and an additional $3,000 per annum for serving as
chairman of a committee of the Board. No additional fees are paid for attendance
at meetings of committees of the Board except that Directors who are not
employees of the Company who serve on the Executive Committee are paid $2,000
per meeting for attendance at the Executive Committee.
The Stock Option Plan for Non-Employee Directors (the "Plan"), approved by
shareholders at the 1994 Annual Meeting, is part of the standard arrangement for
which non-employee directors are compensated. In accordance with this Plan, on
March 5, 1996, each of Messrs. Hurford, Schmidt, Sheinfeld, Wexler and Whitman
were granted options to purchase 5,000 Shares at a per Share price of $13.375,
the market value of a Share on the date of the grant. These options, exercisable
for ten years, become fully vested on March 4, 1997. On December 4, 1995, in
lieu of certain pre-existing contractual benefits as a Director, Mr. Wexler was
granted options to purchase 180,000 Shares at a per Share price of $9.5625, the
market value of a Share on the date of the grant. These options, exercisable for
ten years, became fully vested on June 4, 1996.
BUSINESS RELATIONSHIPS
Mr. Anthony Petrello was a partner of and is currently of counsel to Baker
& McKenzie, which provided legal services to the Company during the fiscal year
ending September 30, 1996 and will continue to render such services in the
future.
6
<PAGE> 11
SHARE OWNERSHIP OF MANAGEMENT AND PRINCIPAL SHAREHOLDERS
The following table sets forth, as of December 31, 1996, information with
respect to the beneficial ownership of the Company's outstanding Shares by (a)
each Director and nominee for election as a Director, (b) Executive Officers who
are not Directors or nominees for election as Directors, (c) all Directors and
Executive Officers as a group, (d) any other person or entity known by the
Company to be the beneficial owner of more than 5% of the Company's outstanding
voting securities:
<TABLE>
<CAPTION>
COMMON STOCK BENEFICIALLY OWNED
--------------------------------------
BENEFICIAL OWNER(2) NUMBER OF SHARES PERCENT OF TOTAL(1)
------------------- ---------------- -------------------
<S> <C> <C>
DIRECTORS
Gary T. Hurford(3).......................................... 2,096,000 2.29
Eugene M. Isenberg(4)....................................... 7,956,349 8.14
Anthony G. Petrello(5)...................................... 3,425,000 3.61
Hans W. Schmidt(6).......................................... 83,000 *
Myron M. Sheinfeld(7)....................................... 42,135 *
Richard A. Stratton(8)...................................... 969,745 1.05
Jack Wexler(9).............................................. 150,000 *
Martin J. Whitman(10)....................................... 1,477,779 1.62
EXECUTIVE OFFICERS (NOT DIRECTORS)
Michael W. Dundy(11)........................................ 7,500 *
Bruce P. Koch(12)........................................... 36,250 *
Daniel McLachlin(13)........................................ 5,716 *
All Directors/Executive Officers as a group (11
persons)(3)-(13).......................................... 16,249,474 15.87
OTHER
FMR Corp.(14)............................................... 10,218,200 11.18
</TABLE>
- ---------------
* Less than 1%
(1) As of December 31, 1996 the Company had outstanding and entitled to vote
91,376,156 Shares.
(2) The address of all persons, unless otherwise indicated in the footnotes, is
in care of 515 West Greens Road, Houston, Texas 77067.
(3) The Shares listed for Mr. Hurford include (i) 2,026,000 Shares owned
directly by Hunt Oil Company of which Mr. Hurford is President, and (ii)
70,000 Shares which may be acquired pursuant to the exercise of options
within 60 days of December 31, 1996. Mr. Hurford disclaims beneficial
ownership of all Shares directly owned by Hunt.
(4) The Shares listed for Mr. Isenberg include 6,363,000 Shares which may be
acquired pursuant to the exercise of options within 60 days of December 31,
1996. Not included in the table are 372,596 Shares owned directly or held
in trust by members of Mr. Isenberg's family of which Mr. Isenberg
disclaims beneficial ownership.
(5) The Shares listed for Mr. Petrello include 3,275,000 Shares which may be
acquired pursuant to the exercise of options within 60 days of December 31,
1996.
(6) The Shares listed for Mr. Schmidt include 80,000 Shares which may be
acquired pursuant to the exercise of options within 60 days of December 31,
1996.
(7) The Shares listed for Mr. Sheinfeld include 25,000 Shares which may be
acquired pursuant to the exercise of options within 60 days of December 31,
1996.
(8) The Shares listed for Mr. Stratton include 950,000 Shares which may be
acquired pursuant to the exercise of options within 60 days of December 31,
1996.
(9) The Shares listed for Mr. Wexler include 150,000 Shares which may be
acquired pursuant to the exercise of options within 60 days of December 31,
1996.
(10) The Shares listed for Mr. Whitman include (i) 757,809 Shares owned by M. J.
Whitman & Co., Inc. ("MJW&CO."); (ii) 166,069 Shares owned by Mr. Whitman's
wife and adult children; and (iii) 523,901 Shares owned directly by Mr.
Whitman. Mr. Whitman is a majority stockholder in
7
<PAGE> 12
MJW&Co. and as a result of his stock ownership of MJW&Co., Mr. Whitman may
be deemed to have beneficial ownership, and the power to direct the vote of
the Shares owned by MJW&Co., and his wife and family members. Mr. Whitman
disclaims beneficial ownership of Shares not directly owned by him. The
Shares listed for Mr. Whitman also include 30,000 Shares which may be
acquired pursuant to the exercise of options within 60 days of December 31,
1996.
(11) The Shares listed for Mr. Dundy include 7,500 Shares which may be acquired
pursuant to the exercise of options within 60 days of December 31, 1996.
Mr. Dundy resigned from the Company on January 15, 1997.
(12) The Shares listed for Mr. Koch include 36,250 Shares which may be acquired
pursuant to the exercise of options within 60 days of December 31, 1996.
(13) The Shares listed for Mr. McLachlin include 5,625 Shares which may be
acquired pursuant to the exercise of options within 60 days of December 31,
1996.
(14) Based on the information contained in Schedule 13G of FMR Corp. filed with
the Securities and Exchange Commission on February 14, 1996, the Shares
listed for FMR Corp. include (i) 9,218,300 Shares beneficially owned by
Fidelity Management & Research Company ("Fidelity"), and (ii) 999,900
Shares beneficially owned by Fidelity Management Trust Company, of which
10,800 Shares are beneficially owned by Fidelity International Limited.
Fidelity has sole voting power with respect to 1,010,700 Shares and sole
dispositive power with respect to 10,218,200 Shares. FMR Corp. does not
have sole power to vote or direct the voting of Shares owned directly by
the Fidelity Funds, which power resides with the Funds' Board of Trustees.
Fidelity carries out the voting of Shares under written guidelines
established by the Funds' Board of Trustees. The address of such entity is
82 Devonshire Street, Boston, Massachusetts.
REMUNERATION OF MANAGEMENT
SUMMARY COMPENSATION TABLE
The table below sets forth all reportable compensation awarded to, earned
by or paid to the named executive officers for services rendered in all
capacities to the Company and its subsidiaries by the Chief Executive Officer,
and the four next most highly compensated Executive Officers serving as of
September 30, 1996 ("Named Executive Officers") for each of the last three
fiscal years.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------------------
AWARDS PAYOUTS
- --------------------------------------------------------------------------------------------------------------------------------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING LTIP ALL OTHER
SALARY BONUS COMPENSATION AWARD(S) OPTIONS/ PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)(1) ($) SARS (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Eugene M. Isenberg 1996 325,000 1,350,000(2) 0 1,000,000 0 36,755(3)
Chairman of the Board, 1995 325,000 1,300,000 0 1,800,000 0 17,438
Director and Chief 1994 325,000 675,000 0 425,000 0 13,419
Executive Officer
- --------------------------------------------------------------------------------------------------------------------------------
Anthony G. Petrello 1996 275,000 300,000(4) 0 303,000 0 447,238(5)
Director, President and Chief 1995 275,000 300,000 0 1,600,000 0 133,069
Operating Officer 1994 275,000 420,000 0 325,000 0 129,293
- --------------------------------------------------------------------------------------------------------------------------------
Richard A. Stratton 1996 275,000 300,000 0 75,000 0 18,774(6)
Vice Chairman of the Board, 1995 275,000 200,000 0 200,000 0 20,180
Director and President, 1994 225,000 135,000 0 100,000 0 15,359
Nabors Drilling USA, Inc.
- --------------------------------------------------------------------------------------------------------------------------------
Michael W. Dundy 1996 147,900 0 0 10,000 0 7,283(7)
Vice President and 1995 140,400 14,040 0 10,000 0 5,885
General Counsel 1994 140,400 14,040 0 10,000 0 5,185
- --------------------------------------------------------------------------------------------------------------------------------
Bruce P. Koch 1996 111,250 23,000 0 20,000 0 5,006(8)
Vice President of Finance 1995 97,500 20,000 0 20,000 0 4,500
and Controller 1994 87,500 15,000 0 15,000 0 3,111
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
8
<PAGE> 13
- ---------------
(1) The aggregate amount of perquisites and other personal benefits did not
exceed the lesser of $50,000 or 10% of the salary and bonus for each of the
Named Executive Officers.
(2) Effective December 12, 1996, in lieu of a portion of his cash bonus, Mr.
Isenberg was granted options to purchase 1,000,000 Shares at a per Share
exercise price of $17.50, the market value of a Share, on the date of grant.
The options vested immediately. See "-- Employment Contracts".
(3) Mr. Isenberg's All Other Compensation amount for 1996 includes Company
matching contributions to a retirement savings plan and a non-qualified
deferred compensation plan of $6,750; and $30,005 that is the benefit to Mr.
Isenberg of the premiums paid by the Company, as projected on an actuarial
basis, for a split dollar life insurance arrangement.
(4) Effective December 12, 1996, in lieu of a portion of his cash bonus, Mr.
Petrello was granted options to purchase 300,000 Shares at a per Share
exercise price of $17.50, the market value of a Share, on the date of grant.
The options vested immediately. See "-- Employment Contracts".
(5) Mr. Petrello's All Other Compensation amount for 1996 includes Company
matching contributions to a retirement savings plan and a non-qualified
deferred compensation plan of $6,750; and $2,376 which is the benefit to Mr.
Petrello of the premiums paid by the Company, as projected on an actuarial
basis, for a split dollar life insurance arrangement; and imputed interest
of $200,293 on a loan from the Company in the maximum amount of $2,881,915
under his Employment Agreement in connection with his relocation to Houston,
which is the balance as of December 31, 1996 and no interest has been paid
or charged thereon; and imputed interest of $129,823 on a loan from the
Company for taxes due for stock grants, which was repaid in full; and the
Company's reimbursement of certain traveling and other expenses of $107,996.
(6) Mr. Stratton's All Other Compensation amount for 1996 includes Company
matching contributions to a retirement savings plan and non-qualified
deferred compensation plan of $6,750; and $2,287 which is the benefit to Mr.
Stratton of the premiums paid by the Company, as projected on an actuarial
basis, for a split dollar life insurance arrangement; and imputed interest
of $9,737 on a loan from the Company in the maximum amount of $104,375 in
connection with his relocation to Houston, which is the balance as of
December 31, 1996 and no interest has been paid or charged thereon.
(7) Mr. Dundy's All Other Compensation amount for 1996 includes Company matching
contributions to a retirement savings plan of $6,656; and imputed interest
of $637 on a loan from the Company to finance the purchase of a home
following his relocation to Houston, which loan was repaid in full. Mr.
Dundy resigned from the Company effective January 15, 1997.
(8) Mr. Koch's All Other Compensation amount for 1996 includes Company matching
contributions to a retirement savings plan and a non-qualified deferred
compensation plan of $5,006.
9
<PAGE> 14
STOCK OPTION/SAR GRANT TABLE
The following table provides information with respect to stock options
granted during the fiscal year ended September 30, 1996 to the Named Executive
Officers:
OPTION/SAR GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
==================================================================================================================
POTENTIAL REALIZABLE VALUE
INDIVIDUAL GRANTS AT ASSUMED ANNUAL RATES
OF STOCK PRICE APPRECIATION
FOR OPTION TERM(8)
- -----------------------------------------------------------------------------------------------------------------
(A) (B) (C) (D) (E) (F) (G)
% OF TOTAL
OPTIONS/SAR
OPTIONS/SARS GRANTED TO EXERCISE OR
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION
NAME (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Eugene M. Isenberg 1,000,000(1) 42.63% 9.5625 12/04/05 6,013,805(3) 15,240,162(5)
- -----------------------------------------------------------------------------------------------------------------
Anthony G. Petrello 303,000(1) 12.92% 9.5625 12/04/05 1,822,183(3) 4,617,769(5)
- -----------------------------------------------------------------------------------------------------------------
Richard A. Stratton 75,000(1) 3.20% 9.5625 12/04/05 451,035(3) 1,143,012(5)
- -----------------------------------------------------------------------------------------------------------------
Michael W. Dundy 10,000(2) 0.43% 10.375 01/17/06 65,248(4) 165,351(6)
- -----------------------------------------------------------------------------------------------------------------
Bruce P. Koch 20,000(2) 0.85% 10.375 01/17/06 130,496(4) 330,702(6)
==================================================================================================================
</TABLE>
(1) The options were granted on December 4, 1995 and were scheduled to vest in
three equal annual installments beginning December 4, 1996, subject to
accelerated vesting as set forth below. The exercise price was equal to the
per Share market price on the date of the grant. Mr. Isenberg's and Mr.
Petrello's options were granted in lieu of a portion of their cash bonus for
fiscal year 1995. In the event that the Shares trade for twenty (20)
consecutive days at an average price that is 15% per annum or greater than
the price on the date of grant, the first installment will vest; if it
trades at more than 32.3% percent, the second installment will vest; and if
it trades at 52.1% the third installment will vest. As of December 31, 1996,
all of the installments had vested. In the event these options or any other
options held by the Executive become vested and are exercised, new options
will be granted to the Executive in a number equal to the number of such
options exercised. Such new options will have an exercise price equal to the
market value of a Share on the date of the new grant. The number of new
options granted cannot exceed the total number of options granted on
December 4, 1995.
(2) The options were granted on January 17, 1996 and vest in four annual
installments beginning January 17, 1997. The exercise price was equal to the
per Share market price on the date of the grant. Mr. Dundy resigned from the
Company effective January 15, 1997.
(3) Represents an assumed market price per Share of $15.58.
(4) Represents an assumed market price per Share of $16.90.
(5) Represents an assumed market price per Share of $24.80.
(6) Represents an assumed market price per Share of $26.91.
(7) As required by rules of the Securities and Exchange Commission, the dollar
amounts under columns (f) and (g) represent the hypothetical gain or "option
spread" that would exist for the options based on assumed 5% and 10% annual
compounded rates of Share price appreciation over the full option term.
These assumed rates, for a 5% hypothetical gain would result in a price per
Share on December 4, 2005 and January 17, 2006 of $15.58 and $16.90,
respectively, and for a 10% hypothetical gain would result in a price per
Share on December 4, 2005 and January 17, 2006 of $24.80 and $26.91,
respectively. If these price appreciation assumptions are applied to all of
the Company's outstanding Shares on the grant date of December 4, 1995, such
Shares would appreciate in the aggregate by approximately $507.2 million and
$1,285.3 million, respectively, over the ten-year period ending on December
4, 2005. If these price appreciation assumptions are applied to all of the
Company's outstanding Shares on the grant date of January 17, 1996, such
Shares would appreciate in the aggregate by approximately $551.9 million and
$1,398.5 million, respectively, over the ten-year period ending on January
17, 2006. These prescribed rates are not intended to forecast possible
future appreciation, if any, of the Shares.
10
<PAGE> 15
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
The following table provides information with respect to the stock options
exercised during fiscal year ended September 30, 1996 and the value as of
September 30, 1996 of unexercised in-the-money options held by the Named
Executive Officers. The value realized on the exercise of options is calculated
using the difference between the per Share option exercise price and the market
value of a Share on the date of the exercise. The value of unexercised
in-the-money options at fiscal year end is calculated using the difference
between the per Share option exercise price and the market value of $13.50 per
Share at fiscal year end, September 30, 1996.
<TABLE>
<CAPTION>
=================================================================================================================
(A) (B) (C) (D) (E)
SHARES NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
ACQUIRED OPTIONS/SARS IN-THE-MONEY
ON VALUE AT FY-END OPTIONS AT FY-END
EXERCISE REALIZED (#) ($)
NAME (#) ($) EXERCISABLE / UNEXERCISABLE EXERCISABLE / UNEXERCISABLE
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Eugene M. Isenberg 0 $ 0 5,366,000 / 0 $39,491,500 / $ 0
- -----------------------------------------------------------------------------------------------------------------
Anthony G. Petrello 0 0 2,978,000 / 0 21,136,813 / 0
- -----------------------------------------------------------------------------------------------------------------
Richard A. Stratton 0 0 950,000 / 0 7,992,812 / 0
- -----------------------------------------------------------------------------------------------------------------
Michael W. Dundy 31,250 294,719 0 / 21,250 0 / 112,031
- -----------------------------------------------------------------------------------------------------------------
Bruce P. Koch 10,000 91,250 20,000 / 45,000 140,312 / 242,187
=================================================================================================================
</TABLE>
EMPLOYMENT CONTRACTS
Mr. Isenberg's 1987 employment contract and Mr. Petrello's 1992 employment
contract were amended and restated effective October 1, 1994 and both contracts
are scheduled to expire September 30, 1999. Under Mr. Isenberg's restated
contract, Mr. Isenberg's salary remained at $325,000 per year and the formula
for the calculation of his cash bonus remained as it had been under his previous
shareholder approved contract, which provided that Mr. Isenberg is entitled to
receive an annual cash bonus equal to 7% of the Company's net cash flow (as
defined in the employment contract) in excess of 15% of the average
stockholder's equity for such fiscal year. Under Mr. Petrello's restated
contract, Mr. Petrello's salary remained at $275,000 per year and his annual
bonus remained as it had been at the greater of $700,000 or 2% of the net cash
flow (as defined in the employment contract) in excess of 15% of the average
stockholders equity in such year. Effective December 4, 1995, in lieu of a
portion of their cash bonus for fiscal year 1995, Mr. Isenberg and Mr. Petrello
were granted options to purchase 1,000,000 and 303,000 Shares respectively (see
"Option Grants in the last Fiscal Year" above).
In the event that either Mr. Isenberg's or Mr. Petrello's employment
contract is terminated by the Company by reason of death, disability, or any
reason other than for cause or is terminated by either individual for
constructive termination without cause, the terminated individual will be
entitled to receive (i) all base salary which would have been payable through
September 30, 1999 or three times the then current base salary, whichever is
greater, (ii) all annual cash bonus which would have been payable through
September 30, 1999, or three times the highest "cash bonus" paid during the last
three fiscal years prior to termination, whichever is greater, (iii) any
restricted stock outstanding which shall become immediately and fully vested,
(iv) any outstanding stock options (including any reload rights contained
therein) which shall become immediately and fully vested. In the event that
either Mr. Isenberg's or Mr. Petrello's termination is related to a Change in
Control, then, in addition to the items listed in (i) through (iv) above, the
terminated individual shall be entitled, upon his election to terminate because
of a Change in Control, to receive in lieu of any such number of outstanding
options, as selected by the individual, an amount of cash in exchange therefor
in an amount equal to (x) the excess of the Change in Control Price over the
exercise price of the options per share of Common Stock multiplied by (y) the
number of options selected by the individual. In the event that either Mr.
Isenberg's or Mr. Petrello's employment contract is terminated for cause or as a
result of resignation, the terminated individual will be entitled to receive (i)
base salary through the date of termination, (ii) all annual cash bonus which
would have been payable through the date of termination, (iii) all restricted
stock that has
11
<PAGE> 16
vested on or prior to the date of termination, and (iv) any outstanding stock
options (including any reload rights contained therein) vested on or prior to
the date of termination.
Mr. Stratton's employment contract that was scheduled to expire on December
31, 1995 was extended to December 31, 1998. Pursuant to his employment contract
extension, Mr. Stratton received a salary of $275,000. Mr. Stratton's term of
employment continues until the earliest of December 31, 1998, his death,
permanent and total disability, temporary partial or permanent disability,
voluntary resignation or discharge for cause as defined in the employment
agreement. In the event Mr. Stratton is terminated by reason of death,
disability, or by discharge without cause in breach of his employment agreement,
Mr. Stratton shall be entitled to the greater of his salary through the
termination of his employment contract or one year's salary and all outstanding
stock options which shall become immediately vested. In the event Mr. Stratton
is terminated for cause or voluntarily resigns, he shall be entitled to receive
only those outstanding stock options which have then vested. Mr. Stratton may
elect to treat any breach of his employment contract by the Company or its
successor, in the event of a merger, consolidation or sale of substantially all
of the assets of the Company, as a discharge without cause.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee is currently comprised, and for fiscal 1996 was
comprised, of three non-employee directors, Mr. Wexler (Chairman), Mr. Hurford
and Mr. Sheinfeld. The Company provided drilling and logistical services to Hunt
Oil Company ("Hunt") of which, Mr. Gary Hurford, serves as the President. The
drilling and logistical services were provided by the Company to Hunt at
prevailing market rates and represented approximately 2% of the Company's
consolidated gross revenue.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
COMPOSITION AND ROLE OF THE COMPENSATION COMMITTEE
The Compensation Committee (the "Committee") meets periodically to review
and recommend to the Board of Directors for its approval policies and procedures
relating to employment agreements, salaries, bonuses, stock grants, stock
options and employee benefit plans for officers and employees. In particular,
the Committee is responsible for recommendations with regard to:
(1) Salary, cash bonuses, stock awards and stock option grants to
management and other key employees;
(2) Policies and practices in regards to employment agreements; and
(3) Stock-based compensation plan, other benefit programs including
shareholder-approved stock option plans and defined contribution
plans.
The Committee conducts periodic meetings throughout the year, culminating
in meetings, generally in December following the close of the fiscal year, to
consider salary adjustments, incentive compensation and related issues.
COMPENSATION POLICIES
The Committee's goal is to establish compensation policies and programs
designed to attract and retain a qualified executive staff for the purpose of
enhancing shareholder value. The Committee is mindful that, over the past
decade, the oil field services industry, particularly drilling contractors, have
undergone severe contractions in activity forcing many companies to withdraw or
be eliminated from the market place. The ability of companies to compete in this
new marketplace depends in part on the need to attract and retain executives
with the necessary industry knowledge and management and financial skills to
preserve and enhance the Company's position, notwithstanding the industry's
characteristics. For this reason, the Commit-
12
<PAGE> 17
tee also is of the view that attracting executive talent from both inside and
outside the industry is important to the continued enhancement of the Company.
Consistent with these goals, the Committee seeks to:
(1) Attract and retain high quality executives needed to manage the
Company and maintain its competitive position;
(2) Reward effective ongoing management performance that achieve the
Company's operating, financial and strategic goals established each
year;
(3) Focus executive attention on enhancing long-term shareholder value
through stock-based compensation programs; and
(4) Reward key employees for exceptional performance with regard to the
Company's success.
The Company's executive compensation program includes base salary and
incentive bonuses as follows:
Base Salary: The Committee reviews the performance of each senior executive
officer individually with the Chief Executive Officer and determines an
appropriate salary level for each senior executive officer based primarily on
individual performance and competitive factors. These competitive factors
include as a reference the base salary of other top executives of drilling
contractors and the oil service sector generally, and also the compensation
levels needed to attract and retain highly talented executives from outside the
industry. For fiscal 1996, the Committee noted that generally the salaries of
the Chief Executive Officer and the next four most highly compensated executive
officers were, in the majority of cases, below the mean of the salaries for the
same categories of the Company's competitors, as reported in the latest
available proxy statements of the five companies other than Nabors, that
comprise the Dow Jones Oil Drilling Index. The salaries of the Chief Executive
Officer and the President have remained the same since 1987 and 1992,
respectively, and were not increased for fiscal 1996.
Incentive Bonus Program: The Committee administers annual review programs
to determine to what extent to reward senior executive officers and key
employees based upon the Company's performance in relation to Performance Goals.
Financial Performance Goals are set forth in the contractual bonus formula for
the Chief Executive Officer and President as described above. With respect to
other senior executive officers, the Performance Goals include both financial
and non-financial objectives, including achieving certain financial targets in
relation to internal budgets, developing internal infra-structure and enhancing
positions in certain markets. The financial criteria include, among other
things, increasing revenues, controlling direct and overhead expenses and
increasing cash flow from operations. The non-financial criteria include
maintaining the Company's share in its principal geographic markets, enhancing
the Company's technical capabilities and developing operations in identified
strategic markets. Based on these reviews, annual incentive rewards are
recommended by the Committee to the Board. Annual incentive awards include cash,
options or Shares, or a combination thereof. Share awards or stock option grants
typically have been issued on a four-year vesting schedule, but the Committee
reserves the right to modify the vesting schedule in its discretion. Annual
incentive bonus awards are not guaranteed except for those subject to
contractual arrangements. The Committee believes that stock option grants and
Share awards are critical in motivating and rewarding the creation of long-term
shareholder value, and the Committee has established a policy of awarding stock
options from time to time based on continuing progress of the Company and on
individual performance. All option grants that are shown in the Summary
Compensation Table for the past three years were made at market value of the
underlying Shares at the time of grant so that holders will benefit from such
options only when, and to the extent, the Share price increases after the option
grant. For fiscal 1996, the bonus and stock options granted to the Chief
Executive Officer and the next two most highly compensated executive officers
were higher than those for the same categories of the Company's competitors, as
reported in the latest available proxy statement of the five companies other
than Nabors, that comprise the Dow Jones Oil Drilling Index. Messrs. Isenberg's
and Petrello's cash bonuses are determined under a contractual formula based
upon financial results. However, for fiscal 1996, the Committee, with the
concurrence of Messrs. Isenberg and Petrello, reduced the cash bonus awards that
they were entitled to under the formula arrangements. In lieu thereof, in
December, 1996, the Committee granted to Messrs. Isenberg and Petrello 1,000,000
and 300,000 stock options, respectively, with a per Share exercise price of
$17.50, the market value of an underlying Share
13
<PAGE> 18
on the date of the grant. The Committee believes that replacing a portion of a
cash bonus with stock options aligns executive interests with shareholders and
is a widespread accepted practice. The Committee also noted that for fiscal
1996, the Company's financial performance was generally above the average to the
five other companies that comprise the Dow Jones Oil Drilling Index as measured
by the performance ratios -- Economic Value Added, Return of Capital Employed,
Return on Assets, Return on Equity. These ratios, provided by Simmons & Company
International, were based on the last four quarters available results.
Section 162 (m) of the Internal Revenue Code of 1986, as amended (the
"IRC"), limits to $1,000,000 the amount of compensation that may be deducted by
the Company in any year with respect to certain of the Company's highest paid
executives. Certain performance-based compensation that has been approved by
shareholders is not subject to the $1,000,000 limit, as well as compensation
paid pursuant to employment contracts in existence prior to the adoption of
Section 162 (m) in 1993. Section 162 (m) applied to the Company for the first
time in fiscal 1995 year. Although the contractual bonus arrangements remained
the same from their previous contracts, certain bonus compensation, as well as
the Share options granted to the Chief Executive Officer and the President
pursuant to the new employment contracts entered into in 1994, may not be exempt
from Section 162 (m) and, therefore, the Company may not be able to deduct that
portion of such compensation that exceeds $1,000,000 (see "-- Option/SAR Grants
in the Last Fiscal Year" and "-- Employment Contracts"). The cash compensation
paid to Mr. Isenberg in excess of $1,000,000 for fiscal 1996 is not deductible.
In reviewing its policies with respect to Section 162 (m), the Committee noted
that the Company may have available substantial net operating losses. While the
Committee intends to take reasonable steps to obtain deductibility of
compensation, it reserves the right not to do so in its judgment, particularly
with respect to retaining the service of its principal executive officers.
CHIEF EXECUTIVE OFFICER
The Committee believes its arrangements with its Chief Executive Officer
have been designed from the outset to align compensation to enhancing
shareholder value. Mr. Isenberg's compensation is made pursuant to a contractual
formula that originated with several of the Company's major shareholders in 1987
following the Company's bankruptcy proceedings. These arrangements were
subsequently approved by the various constituencies in the Company's bankruptcy
proceedings, including equity and debt holders, and confirmed by the United
States Bankruptcy Court. Mr. Isenberg's base salary has remained constant since
1987. The major portion of his cash compensation is the performance based bonus
compensation. He receives a cash bonus according to a formula based on cash flow
in excess of a 15% return on shareholders' average book equity. The Committee
believes that tying the cash bonus to cash flow in excess of a 15% return on
shareholders' average equity aligns Mr. Isenberg's bonus to achieving superior
financial results that should enhance shareholder value. In order to ensure that
Mr. Isenberg and Mr. Petrello would continue to be available to the Company, the
Committee amended and restated their employment contracts in fiscal year 1995
for additional five-year terms (see "-- Employment Contracts" above). Mr.
Isenberg's contractual bonus (as well as Mr. Petrello's) provides for the
mandatory application of a bonus formula. However, as indicated above, for
fiscal 1996, the Committee, with the concurrence of Messrs. Isenberg and
Petrello, reduced the cash bonus awards that they were entitled to under the
formula arrangements and, in lieu thereof, were granted stock options as
described above.
In reviewing Mr. Isenberg's compensation, the Committee took into account
the long-term shareholder value which he had helped create since becoming the
Company's Chief Executive Officer in 1987. The Committee also took note of the
Company's expansion of its U.S. operations, which has enhanced the Company's
operating leverage in the U.S. domestic market. The result of this effort is
reflected in the chart below.
14
<PAGE> 19
FINANCIAL HIGHLIGHTS
NABORS INDUSTRIES, INC. AND SUBSIDIARIES
(In millions, except per share amounts)
<TABLE>
<CAPTION>
====================================================================================================
1996 VERSUS 1995 1996 VERSUS 1991
----------------------------------------
FISCAL YEAR INCREASE INCREASE
- ----------------------------------------------------------------------------------------------------
FINANCIAL DATA 1996 1995(1) 1991(1) $ % $ %
====================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues............... $ 719.7 $572.8 $264.2 $146.9 26% $455.5 172%
- ----------------------------------------------------------------------------------------------------
Net income............. 70.5 51.1 29.7 19.4 38% 40.8 137%
- ----------------------------------------------------------------------------------------------------
Net income per share... 0.76 0.58 0.42 0.18 31% 0.34 81%
- ----------------------------------------------------------------------------------------------------
Stockholders' equity... 457.8 368.8 157.3 89.0 24% 300.5 191%
- ----------------------------------------------------------------------------------------------------
Year end market value
of shares
outstanding......... $1,174.2 $774.2 $340.3 $400.0 52% $833.9 245%
====================================================================================================
</TABLE>
- ------------
(1) The financial data for 1995 and 1991 was restated to include Sundowner
Offshore Services, Inc., which was acquired on October 27, 1994.
THE COMPENSATION COMMITTEE
Jack Wexler, Chairman
Gary T. Hurford
Myron M. Sheinfeld
15
<PAGE> 20
STOCK PERFORMANCE GRAPH
The following graph illustrates comparisons of five year cumulative total
returns(1) among Nabors Industries, Inc., the S&P Midcap Index, and the Dow
Jones Oil Drilling Index.
<TABLE>
<CAPTION>
Dow Jones
Measurement Period Nabors In- S&P Midcap Oil Drilling
(Fiscal Year Covered) dustries, Inc. Index Index
<S> <C> <C> <C>
1991 100 100 100
1992 148 112 96
1993 179 139 137
1994 117 142 114
1995 180 178 141
1996 260 203 265
</TABLE>
(1) Total returns assumes $100 invested on September 30, 1991 in shares of
Nabors Industries, Inc., the S&P Midcap Index, and the Dow Jones Oil
Drilling Index. It also assumes reinvestment of dividends and is calculated
at the end of each fiscal year, September 30, 1991 to September 30, 1996.
ACCOUNTANTS
Coopers & Lybrand L.L.P., independent accountants, have been selected by
the Company to serve as its accountants for the current fiscal year. Coopers &
Lybrand L.L.P. have been the Company's accountants since May of 1987.
A representative from Coopers & Lybrand L.L.P. is expected to be present at
the Annual Meeting. This representative will have an opportunity to make a
statement, if such representative desires to do so, and will be available to
respond to appropriate questions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file with the Securities
and Exchange Commission and the American Stock Exchange initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Officers, directors and greater than ten-percent
shareholders are required by SEC regulation to furnish the Company with all
Section 16(a) forms which they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representation that no other
reports were required during the two fiscal years ended September 30, 1996, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten-percent beneficial owners were complied with except for that
Michael Dundy, former Vice President and
16
<PAGE> 21
General Counsel failed to report on a timely basis two transactions which were
exempt from liability under Section 16.
OTHER MATTERS
The Board of Directors knows of no other business to come before the Annual
Meeting. However, if any other matters are properly brought before the Annual
Meeting, the persons named in the accompanying form of Proxy or their
substitutes will vote in their discretion on such matters.
SHAREHOLDERS' PROPOSALS FOR PRESENTATION
AT 1998 ANNUAL MEETING
If a shareholder of the Company wishes to present a proposal for
consideration at the next Annual Meeting of Shareholders, the proposal must be
received at the executive offices of the Company no later than October 1, 1997
to be considered for inclusion in the Company's Proxy Statement and form of
Proxy for that Annual Meeting.
NABORS INDUSTRIES, INC.
/s/ DANIEL McLACHLIN
DANIEL MCLACHLIN
Secretary
Dated: January 31, 1997
17
<PAGE> 22
PROXY
NABORS INDUSTRIES, INC.
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Messrs. Eugene M. Isenberg and Anthony G.
Petrello, and each of them (with full power to designate substitutes), proxies
for the undersigned to represent, vote and act with respect to all Shares of
Common Stock of Nabors Industries, Inc. (the "Company") held of record by the
undersigned at the close of business on January 10, 1997 at the Annual Meeting
of Shareholders of the Company to be held on March 4, 1997 and any adjournments
or postponements thereof, upon the matters designated below and upon such other
matters as may properly come before the meeting, according to the number of
votes the undersigned might cast and with all powers the undersigned would
possess if personally present.
ELECTION OF DIRECTORS: Election of three directors of the Company to serve
until the 2000 Annual Meeting of Shareholders or until their successors are
elected and qualified.
Nominees: Gary T. Hurford, Eugene M. Isenberg and Jack Wexler
You are encouraged to specify your choice by marking the appropriate box, SEE
REVERSE SIDE, but you need not mark any box if you wish to vote in accordance
with the Board of Directors' recommendations.
SEE REVERSE
SIDE
<PAGE> 23
X PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER.
IF NO DIRECTION IS MADE THIS PROXY WILL BE VOTED FOR ELECTION OF EACH NOMINEE
FOR DIRECTOR.
The Board of Directors recommends a vote FOR the Election of each nominee for
Director.
FOR WITHHELD
1. Election of Directors. (see reverse)
For exempt vote withheld from the following nominee(s):
- --------------------------------------
In their discretion the Proxies are authorized to vote upon such other business
as may properly come before the Meeting.
NOTE: Please mark the proxy, sign exactly as your name appears below, and
return it promptly in the enclosed addressed envelope. When shares are held by
joint tenants, both parties should sign. When signing as an attorney, director,
administrator, trustee or guardian,please give full title as such. If a
corporation, please sign in full corporate name by the President or other
authorized person. If a partnership, please sign in full partnership name by an
authorized person.
- ---------------------------------------
- ---------------------------------------
Signature Date
